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Claiming a Tax Deduction for Personal Super Contributions

The ability to claim a tax deduction for personal super contributions from after tax income has been extended to employees from 1 July 2017.

What has changed?

Prior to 1 July 2017, an individual (mainly those who are self-employed or investors) could claim a deduction for personal super contributions where they met certain conditions. One of these conditions is that less than 10% of their income is from salary and wages. This is known as the “10% test”.

From 1 July 2017, the 10% test was removed for the 2017-18 and future financial years. This means most people under 75 years old can claim a tax deduction for personal super contributions (including those aged 65 to 74 who meet the work test).

Eligibility rules

You can claim a deduction for personal super contributions made on or after 1 July 2017 if:

  • you made the contribution to a complying super fund or a retirement savings account (not including a defined benefit Commonwealth public sector superannuation scheme)
  • you meet the age restrictions
  • you notify your fund in writing of the amount you intend to claim as a deduction
  • your fund acknowledges your notice of intent to claim a deduction in writing.

Age restrictions

For those under 18 years old at the end of the income year in which the contribution is made, you can only claim a deduction for your personal super contributions against salary or business income, (i.e. not investment income).

For those age 65 to 74, in order to make a super contribution, they need satisfy a work test in the financial year in which the contribution is made. The work test is gainful employment for at least 40 hours during a consecutive 30-day period during the financial year.

For those age 75 years old or older, they can only claim a deduction for contributions you made on or before 28 days after the month in which they turned 75.

Notice to your fund

Eligible persons will need to notify their fund in writing of the amount they intend to claim as a deduction and their fund must then provide a written acknowledgement of their notice of intent to claim a deduction. This all needs to be done prior to the lodgement of the tax return in which the deduction is claimed.

Concessional contributions cap: $25,000

Personal contributions that are claimed as a deduction will count towards a person’s concessional contributions cap, which for all eligible persons for the 2017-18 year is $25,000. Exceeding the cap will result in excess concessional contributions tax.

Personal deductible super contributions vs salary sacrifice

Generally having an employer make salary sacrifice super contributions on an employee’s behalf in addition to compulsory employer contributions is the most efficient means by which an employee can plan to maximise their tax deductible super contributions.

However for those employees (or contractors) who are unable, or have not established a salary sacrifice agreement with their employer, this new rule provides them with the flexibility to make a personal deductible super contribution in order to maximise their concessional super contributions. This flexibility can be especially helpful for tax planning towards the end of the financial year.


This information is provided as a guide only and is not intended to constitute advice whether legal or professional. You should obtain appropriate advice concerning your particular circumstances.

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